Gold prices ease slightly in early Asian trade following overnight drop

              Gold prices eased slightly in early Asian trade on Tuesday with the dollar holding largely steady from overnight levels following comments by a Federal Reserve official that were hopeful on the economic outlook.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,273.40 a troy ounce, down 0.04%, in a range of 1,272.50 - 1,275.50. Gold prices hit a session low of USD1,269.60 a troy ounce and high of USD1,289.00 a troy ounce overnight.

Gold prices dropped overnight after Federal Reserve Bank of New President William C. Dudley said he was hopeful the U.S. economy will see better days ahead and stoked hopes that the U.S. central bank will begin scaling back stimulus tools more likely sooner than later, likely in early 2014.

Stimulus tools such as the Fed's USD85 billion in monthly bond prices seek to spur recovery by driving down interest rates, weakening the U.S. dollar in the process and thus making gold an attractive hedge.

Comments from Dudley, often viewed as a policy dove, pushed gold prices lower by stoking sentiments that the Fed will announce plans to scale back asset purchases in early 2014, likely around March.

Elsewhere, National Association of Home Builders/Wells Fargo Housing Market Index came in unchanged in November at 54, missing analysts' calls for an uptick to 55 this month, though metals markets shrugged off the report. - investing.com